Are you recruiting for a role that is sensitive or tactical replacement, or confidential for commercial reasons? Such appointments require Non-Disclosure Agreements between the concerned parties. An NDA will seek to restrict disclosure of confidential information that may possibly cause damage to your plans if inadvertently revealed.
How NDA works when you’re headhunting
There are two types of NDA: one-way and mutual. A one-way NDA is used if only one party is disclosing information. In some cases, a one-way NDA may suit the need.
On the other hand, a mutual NDA is required when both parties will be disclosing information. Especially important when a candidate works for a competitor but you still want them to be able to discuss the projects they have been working on.
As a business leader of an organisation, it is often the business/employer who issues an NDA which is presented and implemented through your executive search partner for candidate agreement or signature. That said, in many cases we use our own. Regardless, it’s crucial to decide on what the NDA should cover. An experienced executive search practice should be able to guide you on this.
Protection of Information
Keep in mind that your NDA could only protect the information that’s discussed during the interview or recruiter assessment, not information that is available to the general public or online for all to see. When drafting a good NDA, one tip is to restrict the use of information and ideas to a specific purpose. You need to specify that purpose in your draft. You don’t need to have all the details in there right away because if anything comes up, you can always widen the permitted purpose.
If you do intend to use an NDA, make sure you understand its implications and limitations. It’s also important to note that even though an NDA is signed, it doesn’t mean that the employer won’t share any confidential information with third parties.
Moreover, your NDA must include a period of how long confidentiality is effective. Usually, the most common confidentiality limit is between three to five years. However, some information can be set to confidentiality forever, such as lists of clients, non-patentable know-how, and personal information of the individuals involved in the project.
The key elements of Non-Disclosure Agreements
The key elements of a Non-Disclosure Agreement are:
- Identification of parties involved – This includes the descriptions of people or organisation included in the agreement.
- Meaning of confidential information – The NDA must include the definition of what is considered to be confidential.
- Scope of confidentiality obligation by the recipient – This describes the entire scope of the confidentiality obligation of the employee or candidate.
- Confidential treatment exclusions – The exclusions from confidentiality treatment are information that is already known to the employee or information that has been disclosed to the employee by another party who isn’t bound by an NDA.
Wrapping Up
Non-Disclosure Agreements are useful for protecting an organization’s reputation, trade secrets, and commercial plans. Despite an NDA, confidential information can still be released. It mainly serves as a deterrent. Therefore, employers must be aware of that risk before they get into NDAs.
For the employees’ side, it’s crucial to read the fine print of an NDA before you sign. We’ve seen many employees who mindlessly sign an NDA only to be sued for breach of contract later on.
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